atlasianthe company behind tools like Jira, Confluence and Trello, today Announced which, after a reorganization a month ago, is now laying off about 500 employees. That’s about 5% of their total workforce.
Atlassian co-founders and co-CEOs Mike Cannon-Brookes and Scott Farquhar note in today’s announcement that this move should not be viewed as a reflection of the company’s financial performance (although it is worth noting that despite increasing its general income in recent years, he continues to report net losses in their quarterly earnings releases). Instead, the co-founders are positioning this move as a “rebalancing” that will help the company prioritize the areas in which it is growing.
“We have made strong calls to reduce our investment in specific areas, in order to reinvest in others,” the co-founders write. “This is different from a financially driven reduction, where you would look to make ‘broad-based cuts’; for example, a 10% cut distributed equally among all organizations within the company. This is not what is happening here.”
Specifically, Atlassian will cut employees in areas like talent acquisition, program management and what it calls “research and insights.”
In the concise language of the company filing with the SEC, the idea here is to “better position you to execute against your biggest growth opportunities.” According to the co-founders, these opportunities are cloud migrations, IT service management (ITSM) and “serving our enterprise customers in the cloud.” It’s no secret that Atlassian’s focus in recent years has been on its cloud services and it appears to be doubling down on that, as well as products like Jira Service Managementthe ITSM solution released in 2021.
According to Atlassian’s filing, the company will incur charges of between $70 million and $75 million in connection with these layoffs.
While layoffs are never easy, the company offers affected employees 15 weeks of severance pay, plus an additional week per year of service, and unused paid time off is also paid. Atlassian will offer employer-sponsored healthcare and expedited vesting for the next six months, as well as visa support. Employees will also be able to keep their work laptops (which is becoming more common).
In a slightly unusual move, the laid-off employees will retain access to company communication tools for the remainder of this week, though users with access to sensitive data will not be able to access their laptops (though they will still be able to). to access tools like Confluence, Slack, Zoom, and Gmail on other pre-enrolled devices).
